The market has peaked

[GW44]

Originally Posted by blargle

this is delusion at this point, another classic warning sign of a bubble.

starting to become quite tired of this forum because of attitudes like this, prices are correcting, simple, you can bury your head in the sand and stick your fingers in your ears, but prices are coming down, and this is only the beginning

if you paid the ridiculous gray market prices, you are going to take a bath, simple, if you bought at retail, then none of this matters

I guess if you don’t like alternate views based on other experiences over many years then it’s fine (in your book) to rudely put those down without any supporting data/argument.

Note that you also omitted my specific own point about only purchasing at MSRP vs. buying from a grey dealer.

And if you’re tired of the forum I guess leave and/or stop posting…..it’s not that hard a decision to make.

[espanol]

All this bickering, for what?

Rolex watches are speculative assets. There is no way to tell if they’ve reached their peak. Speculative assets’ valued is derived solely from someone being willing to pay more in the future. Not income, dividends, production, etc.

Who knows what people will pay in the future. Might be more, might be less. Whichever side you believe is pure speculation.

Perhaps we can agree and leave it there?

[QuelleHeureEstIl]

Originally Posted by rolex16

Market manipulation, hoarding, and price gouging also affect prices and being able to buy at msrp. Consumers have rights to protect them from these unfair practices.

In Switzerland (Europe? US?), it would be illegal for grey dealers to agree on customer prices. This would be considered as a cartel.

Exemples:
- they agree not to sell the Daytona Pandas under 50k [to customers].
- they agree on (customer) buy prices.
- they agree on the minimum discount.
- they agree on the minimum margin.

Who knows what they are speaking about in these whatsapp groups...

[gmtobsessed]

Yaaawn

[dpt.calvin]

Originally Posted by rolex16

Market manipulation, hoarding, and price gouging also affect prices and being able to buy at msrp. Consumers have rights to protect them from these unfair practices.

Protect themselves by not participating in the market. This isn’t food or oxygen. People will live without Rolex.

[dpt.calvin]

Originally Posted by rolex16

You're right, we the customers are the problem. Unbelievable!

Just because someone wants something doesn’t make them a customer.

[Onikage]

Originally Posted by RXB

A Perfect storm helped create this silly bubble. And all those factors are now slowly but surely changing. World is reopening, new Rolex factory in 2023/24, fed raising rates by 200bps by year end and tapering by $95 billion a month. Good luck to those who have their life savings in Rolex. I wouldn't want to be them!

There is a chance the fed could backtrack and poo its pants. Not looking fantastic either way to be honest. Batten the hatches.

[Kevin of Larchmont]

Originally Posted by rolex16

Market manipulation, hoarding, and price gouging also affect prices and being able to buy at msrp. Consumers have rights to protect them from these unfair practices.

And the sky is blue. Now you are listing unsupported conspiracies. Who is manipulating the market? Do I have too many watches, am I a hoarder? Is someone selling their own property for more than you want to pay price gouging? No, none of these things. There is no right to buy an object on demand at retail.

[rolex16]

Originally Posted by Kevin of Larchmont

And the sky is blue. Now you are listing unsupported conspiracies. Who is manipulating the market? Do I have too many watches, am I a hoarder? Is someone selling their own property for more than you want to pay price gouging? No, none of these things. There is no right to buy an object on demand at retail.

I never said on demand. Go re-read my post. Or don’t. I’m done arguing with you and those of your mindset. It is pointless.

[QuelleHeureEstIl]

When Easter holidays are over and China/HK reopens, we could go back to bull...

Remember that making 100USD is a big amount in many highly populated countries. And as long as there is the believe that someone stupider/greedier will buy for a higher price, this could go on for a long time.

Markets can stay irrational longer than you can stay solvent. => Markets can stay irrational longer than your patience to acquire a watch at MSRP.

[Kevin of Larchmont]

Originally Posted by rolex16

I never said on demand. Go re-read my post. Or don’t. I’m done arguing with you and those of your mindset. It is pointless.

Implying that I haven’t read your post is another play at diminishment. You said “in a reasonable timeframe” which is completely subjective. Nice diversion from a right to buy a product at MSRP.

[rolex16]

Originally Posted by Kevin of Larchmont

Implying that I haven’t read your post is another play at diminishment. You said “in a reasonable timeframe” which is completely subjective. Nice diversion from a right to buy a product at MSRP.

You clearly have a comprehension issue. I said re-read, which implies you read. Also, reasonable is not on demand. Now please stop. You have your opinion, I have mine. Enough already.

[Kevin of Larchmont]

Originally Posted by rolex16

You clearly have a comprehension issue. I said re-read, which implies you read. Also, reasonable is not on demand. Now please stop. You have your opinion, I have mine. Enough already.

Nice diversion from the focus of your post, the right to buy a product at MSRP.

Rest now.

[iw8888]

Originally Posted by QuelleHeureEstIl

When Easter holidays are over and China/HK reopens, we could go back to bull...

Remember that making 100USD is a big amount in many highly populated countries. And as long as there is the believe that someone stupider/greedier will buy for a higher price, this could go on for a long time.

Markets can stay irrational longer than you can stay solvent. => Markets can stay irrational longer than your patience to acquire a watch at MSRP.

Yes yes yes..what drove the dip was china/hk lockdown; not Ukraine/russia, US inflation.

Supply will never outstrip demand. And once china opens up, be prepared for demand and prices to surge again..

Remember, there are many, many, many rich people out there..

[WantBlue15202]

If there’s absolute certainty that prices are “never coming down” - why does Rolex hold MSRP artificially low? They sold millions of watches when the prices were market, this above MSRP is a new phenomenon.

It’s similar to bourbon but that’s a consumable (and much cheaper). Once a Rolex watch is made it A. Stays around and B. The consumer doesn’t need to continually buy it.

[doubleinfive]

A post like this reveals the sentiment of the crowd and will determine the direction of the market. I follow the sales activity of one dealer and draw my conclusion accordingly.

[huncho]

Originally Posted by WantBlue15202

If there’s absolute certainty that prices are “never coming down” - why does Rolex hold MSRP artificially low? They sold millions of watches when the prices were market, this above MSRP is a new phenomenon.

It’s similar to bourbon but that’s a consumable (and much cheaper). Once a Rolex watch is made it A. Stays around and B. The consumer doesn’t need to continually buy it.

because higher msrp removes the illusion of exclusivity and hype and in effect, demand. same reason nike doesn't raise prices of rare jordans to $1000 and keeps them at $200 even if they end up trading at 10x premiums the week after release. raise the price of a sub to 15k and less people will attempt to get one

[10klakes]

I don’t know why I can’t stay away from reading these threads, but I inevitably end up reading them. The only reason values matter to me is for future possibilities of trading in or out of certain pieces. The nice part is regardless of the watch market going up or down, the trade values rise or lower and stay relative.

[teck21]

Originally Posted by QuelleHeureEstIl

The problem with the current events (post-covid, inflation, crypto values, China/HK shutdown, Ukraine/russia war, public debt, Central bank policies, Central bank balance sheets, etc) is that all ideas a plausible.
There is no trend. Market can crash and/or market rallies are possible.

Only things which are now facts: during the covid, all countries were fine (we could see it in the stable exchange rates). Post-covid, exchange rates are moving hard. Unrest in a lot of countries is increasing. IMF is now helping more and more new countries.

So as long as the central banks can control everything and the market trust these guys, we are fine. Otherwise everything could turn sour quickly.

That said: LVMH increased massively the prices of all its successful products to enjoy the ride (If you have a wife into bags, you know what I speak about). Rolex, PP, AP, etc could have doubled or more the price of its successful watches. They have not. Why? They know. I do not.

That said 2: For us the best indicator for the watch market is to check the evolution of the grey dealers' ratio of consigned/owned units in stock. If suddenly this ratio increases, it means that they do not trust the market.

Good points.

These tend to get drowned out in the emotive noise generated by consumer frustration.

One answer to your question regarding why Rolex, PP and AP have not doubled their prices though is the fact that they are all privately owned and do not have to answer to the whims of shareholders with different and possibly shorter term economic objectives.

Clearly they see a strategic advantage to not doubling their share price.


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[teck21]

Originally Posted by huncho

because higher msrp removes the illusion of exclusivity and hype and in effect, demand. same reason nike doesn't raise prices of rare jordans to $1000 and keeps them at $200 even if they end up trading at 10x premiums the week after release. raise the price of a sub to 15k and less people will attempt to get one

That is true.

Exclusivity comes from the fact that people can’t simply walk into an AD to get one, even if they can ‘afford’ it.

There’s no exclusivity buying from the secondary market, because all it takes is … money.

And a fixed sum at that. That excludes only the people who don’t have that particular sum of money.


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[David001]

The bubble HAS burst, the only question is will it recover, or just keep deflating. You can get as angry as you like about it, it won't change anything.

The facts as they stand are that interest rates are going up and watches are going down, so unless there is another twist to the global economy, then by the end of 2022 money in the bank will be appreciating and money tied up in watches will be depreciating.

It's a slow reaction at the moment, but if there isn't a twist and recovery then there will be a tipping point and once it goes then it'll happen quickly.

In terms of supply and demand, the grey/secondary market is stuffed to the rafters with enough watches to satisfy demand, there is no shortage of every model, but the high prices created a dam holding them back, so if it tips and these watches start to tumble onto the market, then it will further compound things, it won't be about taking a loss, it will be whether you can sell your watches at all.

I don't know if it will happen but I'm glad I'm not holding any watches that I need to recoup money on because I'd be very nervous now.

[aczaja10]

Prices look to be coming down for now. No one knows what the long term results will be. Everyone here is guessing at that. However, what I have seen in the past 2 years is more and more people get into watches. Whether it be for investing, horological significance or just because they like how the watches look, I am glad to share something I personally enjoy with more and more people. I don’t care why they got into watches, but they did. I hope these people will stay. Perhaps those who got into watches for investing will find other reasons to stay.

[Mystro]

Wait a minute….. Who is selling their watches if the market goes up or down?? Let’s get a grip, we are talking a few grand either way. If $10k-20k moves your needle any way, you are buying luxury products way out of your weight class. These are fun products to be enjoyed in context of your life style and not a nut you bury in the dirt hoping to make a few bucks.

[teck21]

Originally Posted by Mystro

Wait a minute….. Who is selling their watches if the market goes up or down?? Let’s get a grip, we are talking a few grand either way. If $10k-20k moves your needle any way, you are buying luxury products way out of your weight class.

Certainly, and that’s what Rolex is moving away from slowly.

There are still a lot of people for whom that small amount moves the needle, and yet that same amount is all that’s needed to purchase a Rolex from an AD.

Quite a disconnect for a luxury good.

Rolex has been moving away from being a middle-class symbol of achievement because there are way too many of the middle class worldwide now achieving whatever it is they wish to achieve.

Can’t have all of them running around with a Rolex.

I am very impressed and enjoy observing the balancing act that they are attempting.


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[iw8888]

Originally Posted by teck21

Certainly, and that’s what Rolex is moving away from slowly.

There are still a lot of people for whom that small amount moves the needle, and yet that same amount is all that’s needed to purchase a Rolex from an AD.

Quite a disconnect for a luxury good.

Rolex has been moving away from being a middle-class symbol of achievement because there are way too many of the middle class worldwide now achieving whatever it is they wish to achieve.

Can’t have all of them running around with a Rolex.

I am very impressed and enjoy observing the balancing act that they are attempting.


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Rolex wants to be the new Patek. And they intend for Tudor to be the new Rolex.

[ColdWater]

Rolex, no matter how ethereal it may appear, must still abide by the rules of business.

It cannot raise the price of a Daytona 200% or GMT 150% without justification. Costs increases like labor or raw goods, or improved craftsmanship are justifiable.

Rolex can not cite the secondary market as a justification because a Rolex tool watch is not a work of art.

If Rolex made 500,000 SS Daytona's a year the MSRP would be $14,500 and the secondary market would likely be 30-40% below MSRP.

2016-2019 the SS Daytona had a 40% aftermarket appreciation. 2019-2022 another 50% appreciation. The trend continues as long as the supply of SS Daytona's remains constant or a more desirable Daytona is produced.

If Rolex substantially increases the production of it most desirable watches or everyone with a Daytona takes it out of their safes at once and sell on the secondary market the trend will change.

[amanbra]

Originally Posted by Mystro

Wait a minute….. Who is selling their watches if the market goes up or down?? Let’s get a grip, we are talking a few grand either way. If $10k-20k moves your needle any way, you are buying luxury products way out of your weight class. These are fun products to be enjoyed in context of your life style and not a nut you bury in the dirt hoping to make a few bucks.

Yeah if you genuinely enjoy watches and can afford this stuff won’t matter. But there are those that borrow money for this stuff they’re going to get a bit sweaty ;)


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[ExplorerI]

Went into a grey dealer today. As I was talking to the owner I witnessed 3 watches be sold
To other people who walked in above retail. Maybe the prices are stagnating but the demand is still there.

[teck21]

Originally Posted by iw8888

Rolex wants to be the new Patek. And they intend for Tudor to be the new Rolex.

Perhaps not to that extent, but certainly in that direction.

It is interesting to watch.


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[iw8888]

Originally Posted by ExplorerI

Went into a grey dealer today. As I was talking to the owner I witnessed 3 watches be sold
To other people who walked in above retail. Maybe the prices are stagnating but the demand is still there.

Yes the market is moving, albeit slower. People and I mean end-users, are still buying.

I know of people who are capitalising on the dip before prices rise again and they miss the boat